A private developer has agreed to remake a former hospital in Newark into a high school and lease it to the district, a shady and secretive deal that demands deeper scrutiny.
Start with this: Why are both the district and the developer refusing to discuss the terms or answer any questions about their agreement? If this is a legitimate deal, why all the mystery?
This is, after all, about public funds – $160 million in taxpayer funds being paid to a for-profit real estate firm for a 20-year lease. Is this a wise deal? Is it an honest deal? It’s impossible to answer those questions with any certainty, given the suspicious stonewalling.
And to muddy the situation even more, last week the developer suddenly announced the deal is off, although the district has said no such thing, and presumably, neither side can just walk away from the contract. Again, why the mystery?
This lease was approved during a public hearing on Facebook last year in which the discussion of the lease terms was rushed through in less than three minutes. The assistant school business administrator, Jason Ballard, said the “district is going to ultimately receive a turnkey new facility,” and compared the project to the “average $134 million” that the SDA spent on the high schools in Camden, Trenton and Perth Amboy.
But in those projects, the districts owned the buildings. Among the questions Newark school officials still refuse to answer: How much, if any equity, are they gaining in the building after paying $160 million?
The superintendent and school board need to come clean. Superintendent Roger León spoke out publicly and called for a meeting when he learned that the developer on this project stands accused of violating the law by failing to pay laborers the area’s prevailing wage.
Yet when it comes to the basic terms of this deal, he and the school board are hunkering down and keeping mum. It may be that they don’t understand the terms themselves – perhaps they just trusted their broker. So bring the broker to a public meeting to justify this.
“They should be open about this. They should say, this is why we did it, this is the rationale,” said Mary Filardo from the nonprofit 21st Century School Fund, who has more than 20 years of experience on public-private partnerships to build schools.
We also asked the state Department of Education multiple times if the Commissioner approved this lease, as is required, and got no answer. States need to develop their capacity to evaluate these kinds of agreements by school districts, noted Filardo, who advocates for equitable spending and better oversight of school improvements in low-income districts. “They are really complicated,” she said – you need a lawyer reading these things, one who represents the public sector.
For instance: Why are property taxes being paid by the district on this school building leased in Newark, given that schools are normally exempt? And while it may be that the rent is fair, we need to know how much more the district is on the hook for in fixing up this building, given that the lease doesn’t account for furniture, fixtures or equipment.
Also, since the developer is responsible for all improvements on the building, who is going to make sure there are really $77 million worth of upgrades, as the lease says?
Above all, for a partnership like this to work, the district must take great pains “to create an environment where we could all trust each other” – doing everything out in the open and actively engaging the community, Filardo said. That means a need for “the business terms to be clear and defended” so the public can scrutinize them.
When Gov. Phil Murphy returned control of the schools to the city, the idea was to give citizens new power to control their district. They can’t do that if the superintendent closes them out of the discussion, and the board allows that to happen.
Our journalism needs your support. Please subscribe today to NJ.com.
Bookmark NJ.com/Opinion. Follow on Twitter @NJ_Opinion and find NJ.com Opinion on Facebook.